Defunding Financial Services

23 things Congress could defund in Financial Services budget, By Robert Romano, 7/10/15

Next week, the House of Representatives is taking up the appropriations bill for Financial Services and General Government. This is another opportunity for Congress to exercise its constitutional power of the purse through policy riders that can help limit the size and scope of government.

To that end, Americans for Limited Government suggests the following areas where House members might look to offer amendments to roll back many Obama administration big government policies and power grabs implemented in the wake of the financial crisis.

1. Directing penalties from Bank of America’s $17 billion settlement to be deposited into the general fund. In August 2014, Bank of America had to pay a $17 billion settlement to the Justice Department from its mortgage lending linked to its purchase of Countrywide Financial Corp. and Merrill Lynch & Co. To prevent it, or any other settlement, from becoming a slush fund for the Obama administration to play with, Congress could deny funds from being used to direct or transfer any penalties collected under the Financial Institutions Reform, Recovery and Enforcement Act, except to be deposited into the general fund.

2. Defunding Bureau of Consumer Financial Protection Fund or the Consumer Financial Civil Penalty Fund. Created under Dodd-Frank, the Bureau of Consumer Financial Protection Fund and the Consumer Financial Civil Penalty Fund are slush funds awarded from enforcement actions taken by federal agencies. Congress could defund directing any funds obtained by, deposited into, transferred to, or credited to those funds, including the use of such funds to assess or collect any penalties or for the purpose of promoting of consumer education and financial literacy programs. And they could defund the assessment and collection of any penalties that might be directed to those funds while they’re at it.

3. Defunding civil penalties to be directed to the Consumer Financial Civil Penalty Fund. Just like it sounds. Congress could take out another slush fund by defunding the direction of any funds to any for-profit or non-profit entity for the purposes of making payments to the victims of activities for which civil penalties have been imposed under the federal consumer financial laws or to use such funds

4. GAO audit of any for-profit or non-profit entity that received payments from the Consumer Financial Civil Penalty Fund. Not everything has to be defunded. In some cases taxpayers have a right to know how these slush funds have been handled or mishandled so far. Congress could direct the Government Accountability Office to use funds to fully audit any for-profit or non-profit entity that has received payments on behalf of the victims of activities for which civil penalties have been imposed under the federal consumer financial laws from the Consumer Financial Civil Penalty Fund or any other fund.

5. Defunding the Consumer Financial Protection Bureau. Created under Dodd-Frank, Congress could defund the administration of the Consumer Financial Protection Bureau.

6. Defunding 501(c)(4) political speech regulation. In November 2013, the Obama administration doubled down on targeting the Tea Party and other 501(c)(4) organizations by offering a regulation that would severely restrict the political speech of every 501(c)(4) in the country. Congress could make sure that never happens again, by denying funds to research, draft, propose, finalize, or implement any regulation that is similar to the Notice of Proposed Rulemaking that was published by the Internal Revenue Service on November 29, 2013, titled, Guidance for Tax-Exempt Social Welfare Organizations on Candidate-Related Political Activities, pertaining to the activities of organizations that are exempt from taxation under 501(c)(4) that imposes restrictions on independent expenditures, express advocacy or their functional equivalent, by outside political and non-political non-profit and for-profit groups.

7. Turn over IRS emails or no civil servants at the agency get a bonus. After more than two years since the IRS Tea Party targeting scandal was unveiled, Congress still cannot get all of the emails related to the targeting. Perhaps the agency would be more willing to turn things over if Congress defunded the bonuses of civil servants at the Internal Revenue Service until all emails relevant to the targeting are disclosed to relevant committees and subcommittees in full.

8. Defunding implementation of the individual mandate under the health care law. Since implementation of the individual mandate to purchase health insurance occurs by the IRS, Congress could defund the agency from implementing it.

9. Defunding implementation of the employer mandate under the health care law. Same deal with the employer mandate, which the IRS administers. Congress could defund implementation of that, too.

10. Defunding the $100 billion credit line, the new arrangements to borrow, to the International Monetary Fund. In light of Greece’s recent default on some $1.7 billion of debt owed to the IMF, which the U.S. funds, Congress could repeal the 2009-enacted $100 billion credit line that was created in the wake of the financial crisis, to ensure no more U.S. taxpayer monies are thrown at socialist governments in Europe and the banks that enabled them.

11. Defunding any more appropriations to GSEs for any purpose until the companies are unwound. Fannie and Freddie Mac were at the heart of the financial crisis, guaranteeing risky mortgages. Yet, 7 years after the financial crisis, the government still has no plan in place to unwind these so-called Government Sponsored Enterprises. Therefore, Congress could deny funds to administer the enterprises Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation until the Director of the Federal Housing Finance Agency and the Secretary of the Treasury jointly take such action and prescribe such regulations and procedures as may be necessary to wind down the operations of each enterprise as an entity chartered by the United States Government over the duration of the 10-year period beginning 365 days after this provision’s enactment in an orderly manner consistent with the ongoing obligations of the enterprise, including the establishment and execution of plans to provide for an equitable division and distribution of assets and liabilities of the enterprise, including any liability of the enterprise to the United States Government or a Federal Reserve Bank that may continue after the end of the period described above, and may provide for establishment of a holding corporation organized under the laws of any State of the United States or the District of Columbia for the purposes of the reorganization and restructuring of the enterprise; and one or more trusts to which to transfer remaining debt obligations of the enterprise, for the benefit of holders of such remaining obligations; or remaining mortgages held for the purpose of backing mortgage-backed securities, for the benefit of holders of such remaining securities.

12. Defunding the 2010 Dodd-Frank orderly liquidation fund. Created in Dodd-Frank, the so-called orderly liquidation fund is funded by assessments levied on 60 bank holding and insurance companies with $50 billion or greater in assets to engage in bailouts in the event of another financial crisis. Congress could shut that down in short order by defunding any implementation of Title II of Dodd-Frank, and any rule made pursuant to it.

13. Defunding implementation of Net Neutrality. The Federal Communications Commission may have implemented Net Neutrality, but Congress does not have to pay for it. Congress could block any funds from being used to implement, administer, or enforce the rule entitled “Protecting and Promoting the Open Internet,” (i.e. Net Neutrality) adopted by the Federal Communications Commission on February 26, 2015.

14. Defunding the FCC’s national broadband plan. Congress could also defund the “Broadband Technology Opportunities Program” and block any funds from being used to develop a national broadband plan or for carrying out any other Federal Communications Commission responsibilities.

15. Defunding additional broadband programs. Congress could also block funds from being used to implement the Broadband Data Improvement Act.

16. Defunding implementation of the Fairness Doctrine. The Federal Communications Commission eliminated the Fairness Doctrine in 1987, but they could bring it back at any time. That is, unless Congress says they can’t, by blocking any funds from being used to implement, administer, or enforce the rule entitled “Editorializing by Broadcast Licenses,” adopted by the Federal Communications Commission in 1949, or any substantially similar rule that limits or restricts the expression of editorial opinions by broadcast station licenses on matters of public interest.

17. Defunding the IRS, FCC, SEC, and FEC from issuing political speech regulations. It’s not just the IRS that has it in for the First Amendment. Congress should deny any funds from being used to propose or implement any regulation that imposes restrictions on independent expenditures, express advocacy or their functional equivalent, by outside political and non-political non-profit and for-profit groups.

18. Defunding FCC media snooping studies. Remember that Federal Communications Commission study that was going to put media monitors into newsrooms across the country? The one that was so controversial the agency had to pull it? Congress could make sure it stays that way by blocking funds from being used by the Federal Communications Commission’s Office of Communications Business Opportunities to perform any activities related to any studies of Critical Information Needs.

19. Defunding any potential Federal Reserve municipal bond bailout. Laden with open-ended pension and health care commitments that may never be paid, the $3.7 trillion municipal bond market is a ticking time bomb when revenues to states and cities dry up. And we all know what that means. The Federal Reserve will be pressured to buy up the bad bonds the moment anything goes wrong. That is, unless Congress, notwithstanding Section 14(2)(b)(1) of the Federal Reserve Act, blocks the Federal Reserve from making or agreeing to any loan or purchase under that section.

20. Directing GSA to dispose of real estate property the government isn’t using. The General Services Administration has a lot of property that it has been sitting on for years that it really does not need. Therefore, Congress could direct the General Services Administration to spend funds to dispose of all real property held by the U.S. government which has been unused for five or more years and make sure that these disposals occur immediately.

21. Defunding the White House’s National Ocean Council. Congress could block any funds from being used by the National Ocean Council.

22. As reported by the Daily Caller’s Richard Pollock, “The Obama administration has quietly killed an IRS tax preparation program designed to help low-income and disadvantaged citizens, choosing instead to give millions of dollars to liberal groups for the same purpose.” Congress could get those going again by directing funds appropriated to the Taxpayer Services account to provide low-income tax preparation services at Internal Revenue Service walk-in Tax Assistance Centers and by blocking any funds from being used to divert funds from the Taxpayer Services account intended for low-income tax preparation services at Internal Revenue Service walk-in Tax Assistance Centers to any outside community service group or any other non-governmental organization.

23. Defund IRS use of contractors in investigations. Federal agencies like to outsource a lot of investigative and regulatory work to outside contractors, but Congress does not have to pay for it. It could block funds from being used to pay any contractor for work described in 26 C.F.R. § 301.7602-1T or any substantially similar regulation, and from being used to promulgate a final regulation based on the Notice of Proposed Rulemaking that was published in the Federal Register on July 18, 2014 at 79 Fed. Reg. 34,668, or to promulgate any substantially similar regulation.

Robert Romano is the senior editor of Americans for Limited Government.

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